tv Squawk Alley CNBC September 24, 2014 11:00am-12:01pm EDT
boosting capital levels. now we can start growing the capital level again and grow the balance sheet. >> do you have plans to go beyond the northeast. >> i think there is great potential just to maximize where we are banking so we see lots of the opportunity or organic growth as we run the bank better. >> we are seeing it rise a little higher new. >> come back often. as we track you through. >> i'm sure the investors will be very much watching our execution. we feel really good about the plan we have. >> thank you very much. the ceo of citizens park. we are behind time now. time for squawk alley. >> thank you guys. almost 8:00 a.m. at apple headquarters. john steinberg, ceo of the daily mail. kayla and josh, good morning to all of you.
the apple 6, apparently the new phone, especially the 6 plus is prone to bending. a small but growing number of users have reported bent the phones after carrying them in their pockets. people are posting pictures with the #bend gate. of the four of us john, i think you are the only one who actually has one. >> i was very nervous all weekend. i'm no longer wearing skinny jeans. back to dad jeans. carrying my satchel. >> oh sorry. >> fort's got it too. >> but it is scary to carry it around. if the iphone 6 is what you wanted it to be and they said you don't have to handle it as delicately as a newborn baby. that would be a feature we all love. >> how do you even fit that in your pocket unless wearing with the giant pockets? >> i don't. this feen is too big for me. i've run into a number of people who say it is the perfect size
for them. but this is a bit less personal than a lot of smaller smart phones. from the standpoint you have to be careful how you hold and it how you carry it. so you are probably going to take it out a bit less. but when you do you are going to be more immersed in it. it's more as some people have said towards a tanlt than a quick use smart phone. >> i don't think it is a major issue. but it is a an issue. and in the review he dropped his. and he was first to say it was his fuault. it does feel slippery and the delicate. and it can see there being a lot more drops with that said. >> is that a problem? >> it is a consideration i would say. as long as people don't expect to use this, to carry this, to handle this exactly the same as they have smaller phones, it is okay. as long as the expectations are set correctly. but i think there has to be messaging about that. you can't put it in your pocket for multiple hours. go to a wedding, as one user said they did. because it might end up bent.
>> is it an issue for the plus? or the six? or both. >> we got both here. there is aluminum used in the body of these two. and aluminum is flexible. so the longer this is, the easier it is going to be to flex. if you have pressure applied at both ends. >> the problem though is not necessarily with the aluminum which because of its own substance is supposed to bend. the problem i've read is that the display could be affected be because the glass is not supposed to bend and some other components that effect the display. >> actually -- >> we haven't seen if it has long-term effects but what do you think would happen. >> in the demonstrations the glass hasn't cracked. it is the weaker points to the volume buttons where the bend happens it. could be a situation where the phone bends the components still work inside. but it doesn't look so great to have a bent phone. >> i think it is going to influence fashion to some
extent. i think that you will have suit makers come out with pockets. suit cargo pants. >> you are serious? >> i'm a little bit serious. i think the large screen is here to say. and you are if you are not wearing the jacket you can't comfortably carry it. >> you can't be be a trend setter in everything, john. >> the murs. >> you think everyone is going to start carrying those. >> i think men are between wanting to carry the ipad and the larger screen phone. we saw a lot with google glass. no one is guying google glass. a lot are buying this. a lot of people made one the iphone faces and things like that. >> and apple gets a cut i might add. >> larger phones are more particular in asia. and not as popular in europe are, where man purses are also popular. and they still don't won't big
phones. >> if apple put cargo pants in the apple store, they would sell. >> a blackberry is launching that you are own new phone today. the passport. about 600 bucks and goes on sale in two weeks. john fort has broungt. >> this is my actual passport and the reason why they call the blackberry passport the blackberry bass port is because it is the so isame size as a pa. the keys down here are just for texts. the screen is wide enough. you see it is square. you get 60 characters across at a reasonable resolution. that is really close to the 66, which is a standard for books. so it is the easiest phone to deal with documents i've seen. but all that said, this is not a phone designed to compete directly with the iphone 6 and 6
plus. blackberry strategy now has to do with secure software. this is selling software. if blackberry sells ten million of these in six months it will be a run away success. apple id did that many in a weekend. >> the argument here is we want more doctors, architect, engineers to be able to open devices on these documents for which security is very important. but do you see where applications already cater to those? do you see some professions switching en masse to the positi passpo passport. >> i think blackberry has started a conversation around the core competences. i don't know that these themselves are going to fly off the shelves. the argument is there is a certain demographic that already carries more than one device. they want to attract these people with this. but the bring your own device
trends, those people are more likely to pick android and software because they are using software to secure those devices. >> does it mean blackry who was going to get out of hardware altogether are wrong. >> i like the modest expectations. if they ten million over six months. they do 3.8 billion in revenue for the financial year right now that should be flat relatively for the year after that. it has to be worth something. it has to be worth something more than that. even has a takeout. and if they show a good niche market they should get the stock up a little bit. it's so beaten down at this point. >> this is hard to explain on tv. but a feature called blackberry blend, allows you to access message, photos even things on the phone from a tablet or smart phone. you can access your calendar from ios. that feature itself is potentially extremely valuable. that could even put it in a smaller piece of hardware, like
a pager, throwback for blackberry and sell that. >> 600 the right price target? >> that's off contract, which is actually pretty competitive if somebody subsidizes it. >> you going to stick around john? >> yep. >> in the meantime our stocks have turned positive once again. hovering near break even for most of the morning. let's get caught one sarah. >> reporter: citi spend a new s&p target, 2200. so you are expecting stocks to continue this record run. >> we expect to continue, but not this year. really next year. we think this kind of adjustment to fed policy shifts, timing intensity of rate hikes is going to dominant mind sets over the next few months and i call this a kind of break. >> losing momentum. >> kind of a pouz. >> we got through the big fed meeting and the alibaba. what is the next catalyst. >> we're having more fed
meetings and discussions. >> but you are not scared of those? >> not really. we're going to take janet yellen at her word. end the bond buying program. but everyone is focused how much of how soon and that is going a brake on the market. >> talking about american leadership. when you look at global markets in the global economy, the united states is where it's at. that is the engine of global growth right now. how does that play into your forecast? does that mean the flows continue in. >> >> the flows haven't really been coming in which is the interesting part it's been more companies buying their own stock. >> they're going into sbonds. >> bonds yes. not not more in stocks. i thought your question was more on equity markets but back in 2011 a report called the raging bull the idea that u.s. was entering a new secular revenue market. the shale gas revolution, housing coming back,
manufacturing. >> and those will continue to carry us. >> those should keep going and that keeps us going a longer term bull market. it doesn't necessarily demonstrate american leadership. the leadership issues are a elsewhere in the world. >> we just broke 128. strong dollar, week euro a lot of people see this as the headache for the u.s. stock market. >> it tends to be the dollars very important for specific sectors but it isn't necessarily for the broad market. >> who's hit the worst? energy. >> energies commodity, materials. household product, pharma that have large sales over seas that translate to fewer dollars. >> you seeing trends now. >> i think it's technology. the financials are typically more domestic but technology is still a global play. i think the dollars a head wind but it isn't the issue.
a lot of people say buy small caps if the dollars strengthening. but historically. >> but small caps are getting beat up. >> we've had a large cap focus since the beginning of the year and people say this means risk off so think about the strongest markets of the world year old year to date. argentina is a risky. you are seeing lots of the markets who aren't necessarily low risk doing very well. it's more about business fundamentals and even the fed rate hikes. if that goes up you discount from the future back to the present. the values of the companies hat a higher discount rate it hurts the faster grower smaller cap companies. >> and a we have and earnings and the federal reserve as you mentioned what. worries you the most in terms of this market stalling out? because we haven't seen a selloff lasting more than three days that the point. >> probably the thing that
worries me the most is on the sentiment side. >> where are we? >> it's near euphoria. >> people still complain. >> they are complaining because they pulled back recently. which means they were long. we moved 25 pointes on the s&p and everybody is getting nervous, means they really went long. we look at hedge fund beta leverage as pretty high now. and even more bulls in the market. we're really seeing that shift. i was in europe and people were pretty complacent and pro u.s. that's unusual. >> it's interesting to get your thoughts especially as you say book your profits for the year going up next year. >> there is a new year tomorrow. >> yeah. and happy new year to you tobias. the chief u.s. ekt strategist for citi group. >> when we come back, apple ceo tim cook bashed google for making money on customer data.
today eric schmidt responded. plus ron johnson delivers. the former ceo of jc penney. and eli musk says shares of tesla are too high. and stocks might agree. we're going to talk to chairman bob lusic about tesla later this hour. but systems policed by hp's cyber security team are constantly monitored for threats. outside and in. that's why hp reports and helps neutralize more intrusions than anyone... in the world. if hp security solutions can help keep the world's largest organizations safe, they can keep yours safe, too. make it matter. ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows.
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currently back to 19.89. session highs now. tim cook made head lines recently for bashing competitors like google for making money off customer data. eric schmidt responded today. >> is he really familiar with how google works? and i mean the product not the book. we do do targeted ads against g mail which we've done for a decade but we don't otherwise use that information and we don't do the other things he is implying in a careful way. >> in the news business, this is delicious john. what do we make of what both sides. >> i'm not sure what eric smith is talking about. google gathers a lot of data about where you go and what you surf and uses that to target ads towards you. and that seems to be what tim cook was talking about. so i'm not sure what distinction he's making from what he said
this morning. john, do you know? >> well what makes sense to me is tim cook, who just had a major breech of information on icloud and had ied is punching about google's core business. >> but also to say we only do targeted ads in g mail. arguably that is the product users share the most information. yes maps and others but that's valuable information and in g mail you are having real conversations with people. >> what he could have been saying is you are only personally identifiable as the person you are in g mail where you are not as anonymous with a cooke in other places. >> it's a distinction without a
difference, right? when you are in youtube you are getting ads based on what you have done elsewhere on the web. double click is an enormous network and there are cookies following you all over the place. >> and that is not unique to google or the marketplace. facebook doing is same thing. >> i don't know that tim cook specifically called out google. he just said companies out there do. similar to companies out there saying similar like apple. we don't try to charge you for the device up front. we try to make money when you use it. i it's a fair business model. it's depends whether customers are going to pay attention to that. up to this point they haven't. >> each company attacks the others in the business lines they are not in. and it's unfair of apple to do this because they had very high aspirations for iad when they launched. google is very strong in
advertising so it seems a little desperate for tim cook to attack eric, and good for eric schmidt to come back and say maybe his definition is confusing. >> even if we didn't get exactly the answer to solve that question. but we'll save that nor a later day. when we come back trying to cure world hunger for their 18th birthday. to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial.
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google crowning the winner of its science fair yesterday. three teenagers from ireland took home the top prize. their project used bacteria to combat world hunger. we caught one them yesterday and they told us exactly what they found out. take a listen. >> we found that by using this bacteria we were able to increase the rate of germination by 50%. so this means that there will be less seed loss due to seeds in adverse weather conditions. we also increased overall crop yield by 74%. this means safer for the developing world, 70% more food
and for commercial farmers more income. and this means nmore nitrogenou soils. and we were very glad when it worked. we were almost the underdogs but we feel like we beat the odds and found a solution to the food crisis. >> i don't know what you guys were doing at 16 but pretty impressive project. >> that is literally, it gives you chills how inspiring. >> and everybody said it wasn't going to work and we did it and it worked. the entrepreneurs at a very young age. i love it. >> maybe the next marissa meyer or shale samberg. it's good to see. >> extraordinary session paul. getting clearer to an idea we may get full blown qe from the european central bank. for the moment note we have a
slight outperformance from italy today. the big news was the efo survey of the german business sentiment came down again for a fifth straight month. it is still quite high but the deterioration is a indication that germany like other economies are in trouble. yesterday the manufacturing data for germany, survey data indicated they might be grinded to a halt in terms of growth. in terms of the mix let's check the euro which fell again today. it fell below 1.28 to a 14 month low. the head of the european central bank was talking on french radio and saying it was reacting because of the difference with what we're doing with basically the fed. he didn't name it. but he suggests the inference was the euro could go further lower and people are more actively talking about him having to come in and buy huge sways of the european bond market to get the recovery going again in europe and hinted on monday they might well be open to doing that.
and if you look at the corporates today, you get this continued drum beat that something is really not quite right. take tnt express which is a huge dutch logistics company and they are down almost 10% today. they abandoned the profit target because of the lack of recovery in europe. and a really telling indicator is in adecco. one of the largest temporary employment operators in the world based in switzerland. the primary market, a major market, is france. and they are suggesting for september and they get an advanced look. they can see the cutting edge of hiring or temporary hiring and they are not getting the pickup they would have expected in france and germany in particular this time of year. things are really changing in europe and ultimately the view seems to be the ecb in trouble with the economy. they will have to come through
with full sovereign qe. >> thank you simon. when come back, e lan musk said tesla stock is too high. the stocks are listening. down 10% in the last few weeks. when we come back, dow is up 75 points. work with equity experts who work with regional experts that's when expertise happens. mfs. because there is no expertise without collaboration.
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it's always interesting when john chambers of cisco has comments. often colorful. you have some of those today. >> i was up at the breakfast this morning in mid town. john chambers was there. he talked about politics. hillary clinton, he is a known republican. he had nice things to say about her. he said she's really good. she would make a really good world leader. it pand hined him as a republic but republicans should worried he said. he also talked about folks like cisco might be interested in picking up storage assets should activists be successful in getting them to spin some of those off. chambers said he usually gets the opportunity to pick up assets if they come available but if joe and i were going to do something here, we would have done ate year ago. also talked about valuations in
silicon valley saying there is a double among some of those. look at the high pe start-ups. some are taking money too early and there could be a hard landing if there is a shock, particularly geopolitical that does effects the markets longer term. which we haven't those so far. >> the year or two ago makes sense to me. a year or two ago the growth hasn't happened as fast and i think they all want to double down there. so buying an additional storage or hardware company at this point would make sense. >> he also talked about emerging markets. you might have seen that on the screen and the potential of rising interest rates. he said if rates do rise that will choke off growth in emerging markets so we need to be careful with that as with e. >> on the emc point john, let's recall a year or two ago. these rumors have been around for a long time and emc was fiercely adamant it was going to be a stand alone company and
going to go it alone and the rumors for false back then. so you wonder who chose not to do this deal if it were to happen a couple years ago. >> i i don't know. but also when ever you talk about emc you have to think about vm ware and it has i think close to 70% of. that company has been making moves. that is part of the ebay, paypal, emc, the vm ware. the pressure of activists to extract values. >> conversation assets echo what gurley said from mensch mark as well. >> and tesla shares have lost their charge this month. down nearly 7%. on the heels of analyst downgrades as well as elan musk admitting shares are kind of high right now. bob joins us to talk more. good to have you back.
a lot of discussion about what's the la has to do right to justify the price they have already been given. what do you make of that? >> well first of all i think elan musk is right. it is grossly overvalued right now. when you look at it the total production to date is still less than one day's production of general motors or ford. so it is filled with a lot of hype but they are going to have to do an a next generation of car which is smaller and with new types of batteries that give a range of 2 to 300 miles. and until they do that, it is going to remain a fringe brand. >> some of the downgrades lately have argued, look, if this were really the dominate technology in the long-term, we probably would have seen some of their big rivals start to dip tear toe in. why hasn't that happened? >> well because right now battery operated technology is still a french technology.
the range is limited. and if you want more range you have to go for a hundred thousand dollar automobile and that is a limited market. i think in 5 to 10 years we'll see lithium ion batteries or the successors that have a lot of range. but the thing to remember now is the battery technology that's the la uses is no different from anybody els. they just back more battery into the car. >> when you look at the range issue, is it a range fear? >> yes. >> are people aflad of running out of battery? or do people really have enough range with the car. are most commuter distances so long that people should have that concern? or is it psychological. >> it's both. the range is always calculated for a standard day which is sort of 65. if it's 95 or 35. your range can be 25 or 30% less. so it is what's commonly known as the range anxiety.
the only way you can make that go away is with a battery pack that stores like 300 to 400 miles so that every morning when you go out to your car you have 400 miles in the tank. >> bob, we were moving into a season where apple is going to launch car play. we have google planning to put android in the car. the experience inside and the upgrades there have long been important profitwise for the auto industry. how do you see this playing out? is it dangerous or okay for some of these technology companies to be getting their brand right there in front of the driver? >> i don't think it is a problem from a safety standpoint, provided the stuff is not enabled for the driver while operating the vehicle. but look, this thing is -- we've got two converging trends. one is trend to the autonomous car. and the other one is to have the vehicle basically be a mobile browser, where you are totally connected with everything all the time. and when both trends are far
enough, you will be able to do anything you want in your car, read book, do your mail. do facebook, etc. etc. and the car will do the rest. >> bob there are some aspirations at gm to make some of the older brands a little more trendy. cadillac now its own business unit, relocating to sew hoe. do you think gm strategically can revive that brand? and what do you see the aspirationings with cadillac actually being? >> cadillac first of all is quite successful. it e really back from the dead as a result of the almost 15 year investment program. and ask anybody who owns a cadillac they will tell you today there are as good as any german car. the problem is the american public still is not convinced of that. whether moving to soho and being in a cool east coast quasieuropean environment and
getting maybe trendier advertising agency, whether all that is going to do any good, i'm highly skeptical. you remember lincoln mercury years ago relocated to los angeles because they thought it would make the brands cool. at end of the day the only thing that is going to make cadillac really cool and fully competitive with the german cars is world class products and word of mouth advertising from satisfied customers. >> well bob you certainly got viewers hacks up whenever you say something good about tesla. >> i'm not hearing you anymore. >> probably for the best bob. we'll talk to you soon. talking tesla and the move about cadillac today. amazon boosting staffing at silicon valley by 27%. working on smart energy home devices for the next five years. interesting as investment continues they plow the money
in. >> what's so interesting about this lab this is where so innovations have come out of. the kindle, the fire phone. what's next in the kindle was huge t fire phone is verdict is still out and probably negative. but it's exciting. >> this makes a lot of sense. amazon is moving its strategic center into the home with its grocery play, now the connected home idea. you can imagine with alarm systems and things like that which google has moved into. with nest, which apple is attacking. google home kit and probably effective. >> this already has a thousand point so ramping it up by 27% is a solid amount. do you think they can go beyond just being a trial and error factory? >> i think it is already. amazon so big in terms of eco system t logs it gets the engagements in e-commerce, the hardware strategy so the drive
usicage on that platform in the home era. they have to be there in the home if you are ending up ordering things automatically. >> i like it a lot. and the roiters piece pointed out. they were selling tons of the physical books. they went into kindle and crossed that chasm. and with a cheap sensor that possibly you can embed in the home appliances it is good fit. >> a hashtag today amazon wish lists. when we come back, we're going to take a look where he's making the next move. first rick santelli, what are you watching today. >> some of the discussions on the blog-o-sphere about deflation, disinflation and inflation. we're going to discuss what drives higher prices.
and we are also going to look at china. pop goes the weasel. many believe the credit bubble in china has already popped. has it? we'll talk after the break. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade, we looked for the best price, and the trade went through. do the other guys guarantee that? didn't think so. open an account and find more of the expertise you need to be a better investor.
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enough. and venture capitalist ben lairer is trying to change the face of e-commerce with thrill list, why smaller might be better. and don't look but blackberry is up more than 40% so far this year and they are out with a new smart phone today. did they get it right? this week's tech crowd features wearables and indie go go campaign raising money for a smart ring and a kick starter project looking to start a smart bracelet. check them out. >> the mota smart wring is taking on watches. the interactive ring sends users smart phone communication, from calls and texts to social media alerts. the campaign's goal, $100,000.
so far it's raised more than 85,000. ella moon, it is not a smart watch. it is jewelry. able to change the look and design of the bracelet and notifies when a call or text is rereceived and can find a missing phone with audio alerts. the goal, is $100,000 and the goal has been surpassed. who should be this week's leader? vote now. >> let's send to it dominick and get a quick market flash here. >> watching the bouncing yahoo stocks. yahoo took a big hit friday as critics argued one of the biggest drivers of yahoo's value was now you have a table with alibaba now done. they are down just about a percent on the year so far.
remember, since the 15th they did drop as much as 14% so maybe some folks at least looking for a nice bounce in yahoo shares. back you do. >> over to the immediate group and check in with rick santelli. >> good morning carl. i have some sources that the sunrises and the sunsets on everything that is china. and i have to say that their direction of late has been very correct. they beat many large banks in at least the notion that growth is slowing and whether it is 7.7, 7.5 or 7.1 the idea that wow that is so much better than europes and u.s. growth, it is not anything to worry about. in a closed system everybody adds the growth and you get a total number. if one area is higher than another, that is fine but the rate of change and how it effects the entire closed system that matters the most. a wall street journal has a very interesting story that central bank in china may be looking to
replace personnel. is that going to put a stop to all that ails china? i don't know. but i would think that with commodities and one of my source's words being a sliver of the huge chinese carry trade t person who arranges the credit deck chairs is not going to change the ultimate direction. and the direction is clear, central bankers and investors are going to factor into that a global growth model. now when it comes to models and economics i always thank you it was the dismal science. two and two is never four and depending who you ask you get different answers to every question. currently quite a few disinflation kah sandras wroling around the globe. i think they are moving to the notion that disinflation or dropping prices is horrible because people are going to wait on major purposes. is that the type of behavior anybody sees? i've never seen that. here is what i see, is that price increases are a by-product
of consistent, productive, sustainable growth. end of story. go buy your textbook on economics. go get your mit model that created a boat load of the liquidity sitting in the excess reserves with no velocity. but prices going up and that seems to be the driirection of e banks of since the beginning of time, get growth up. get real growth up. and it seems as though we haven't learned that productive growth you don't back into it by creating full inflation. back to you. >> thanks. when we come back ron johnson is on the comeback trail. why he's turning to the start-up world if for his next venture. and dough up 89 points. s&p near session highs. squak alley is back in a minute. the performance review.
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gave the company a market cap shy of $500 million. it is far higher today. a israeli company of cybersecurity software. licenses to companies so help thwart attacks basically cleansing out the internal system. nonetheless cybr a solid trade today at the nasdaq. ron johnson has flown under the radar since exiting jc penney ny. but what has been been up to. jessica lessin joins us this morning. you describe this as sort of a combination of best buy's geek squad and apple's genius bar. what is it exactly? >>. >> caller: it is to be able to have a user run a phone or even a pc from their phone and have
it delivered wan very shormt amount of time. so the man whose a legend for creating retail stores and the experience around stores is now placing bets on scoreless kind of commerce world. so entering that sort of same day quick delivery space that so many tech giants are in but bringing the gadgets to the shopper and also focussing on the experience. i hear that they are very keen. and i guess this is where the genius bar concept comes in to really help people setup and use the kwies devices as well. >> is the idea this would be a stand alone entity or work in conjunction with cell phone carriers? how exactly would this work and how soon to you see it actually launching? >> so my sources told me it could launch as soon as next year and it's very much in self. they have been sort of camped
out in palo alto. i think the idea is to have partners for the delivery of the products. i hear they have been talking to at&t and samsung and other companies they would work with to provide the service. but would be a stand alone business, have its own investors, etc. >> jessica, this seems like a very odd idea. who is this targeted for? who can't just get a phone shipped overnight from amazon? people need setup? they can't figure out how to work their devices? what is this idea. >> i think if you look again, it varies city by city but clearly quick delivery is becoming a big thing. amazon, google shopping express. a lot of custom e-commerce brands are also offering it. so i think there is this demand. even uber is getting into trials this with. i think this is a real trend. there is a market for the consumer who wants it now. and i think the service idea is
interesting. now knowing ron, i imagine there will be a very sort of high-end spoke, if you will, aspect to this. almost like a concierge kind of service. and very forecasted on brand. so i think they will play up convenience and also the experience thing. but i think that is what we're going to have to wait and see. and that is where i bet people are betting that ron can do maybe something different than the other folks in the space because he has a deep understanding about a brand. but good yquestion. i'm not exactly sure of the target customer but i think the same day quick delivery trend is real and important. >> it makes sense to me when you consider tesla is doing service at homes and targeting affluent consumers and possibly older people. and the internet of things. when you are getting more gadgets inside the house that have to talk to each other. do you think that is kind of how this is being pitched.
people have enough trouble with plain old wifi and making things work as it is. as we get more into the internet of things it is going to get more complicated. >> i think it's in demand. i the question i have is the business model. it is not clear what premium people are willing to pay. and when you have rates and margins, i think that is one question hanging over this. i think it is a nut they can crack but there is a gap between the need to stitch all this together and what people are willing to pay. >> jessica we appreciate your reporting this morning. quite a comeback story if it ends up happening for an executive that took a company from a storied brand to relatively scorched earth. so we'll see what he does with this new endeavor. >> thanks everyone. >> when we come back we'll look at the pot preneurss when squawk
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pot-preneneurs are opening up everywhere. but opening a the marijuana business isn't all its cracked up to be. >> well starting a marijuana business may seem like an opportunity to cash in as 23 states have legalized the drug for medicinal use and california and washington taking it a step further, legalizing for recreational use in both states. and on november 4th. alaska, florida, oregon and washington, d.c. could join the recreation rank as well. so plenty of cash is to be made. nerd wallet came out with a report that if all 50 states legalized today they would collectively pocket more than 3 billion a year in taxes. colorado will take in 70 million a year for legalization. but setting up means paying up. and there are limited licenses available with varying application fees.
if an entrepreneur can't designate they are in control or possession of the building they are selling in they have to put up a $2 million bond. another thing as stake, taxes and audits. normal banking relationships are hard to come by because the drug is still illegal under federal law. so owners say the effective tax rate can be as high as 70%. no matter the state. and finally pricing, in new york which is waiting on guidelines from regulators before patients can start purchasing legally, the department of health will set the drug's price. so this has people concerned. because if prices are too high the black market might start looking good again to those who are strapped for cash. >> thanks kate. and even homeowners could have lead writers because it's still illegal federally.
s&p, we're still high. go pro is up. a lot of tech movers on an overall green tape surprisingly so. >> a lot of winners we are awe customed to see. gus. go -- guys. let's get to scott wapner. >> welcome to the halftime show. joe terranova. josh brown, is ceo of rid hoelts wealth management. john forrian, and steve weise. we begin with stacks hoping to avoid their first four day losing streak of the year. looks good so so far. but some are asking if the bull market is running on fumes. still others insist there is more room to run. so we asked the traders this pressing question today.